My latest post on #Exor.
$EXO is trading almost 50% below its NAV (close to 100% upside). I discuss what the market may be getting wrong about the company and why I disagree and continue to hold the stock. 1/7
$EXO is trading almost 50% below its NAV (close to 100% upside). I discuss what the market may be getting wrong about the company and why I disagree and continue to hold the stock. 1/7
Exor's market cap is €14.7bn, of which net cash is €5.1bn. This leaves €9.6bn for the value of all businesses in its portfolio. Note that just Exor's stake in Ferrari is worth €8.7bn, which implies that the market is valuing all other assets almost at zero. 2/7
At the current price of €65, you only pay for a 24.2% stake in Ferrari (€37.8), net cash (€22.2), Seeds and Other minor investments. All other businesses come on top of this for free (14% stake in Stellantis worth €25.9, 26.9% interest in CNH - €19.6 and many more). 3/7
The market may be concerned by Exor’s too high exposure to Europe, cyclical sectors, as well as several unpleasant surprises and lack of ‘exciting news’.
I think limited research coverage and moderate liquidity of its stock are two more reasons for the discount. 4/7
I think limited research coverage and moderate liquidity of its stock are two more reasons for the discount. 4/7
I disagree with the market as Europe accounts for less than a third of the NAV and cash + Ferrari make its exposure to cyclicals much less significant. 5/7
Why I continue to hold the stock:
1. It is very cheap
2. It has a strong capital allocation track record
3. Alignment of interests among key stakeholders
4. So much pessimism around Europe and Macro (cyclicals) make them quite interesting from a contrarian point of view. 6/7
1. It is very cheap
2. It has a strong capital allocation track record
3. Alignment of interests among key stakeholders
4. So much pessimism around Europe and Macro (cyclicals) make them quite interesting from a contrarian point of view. 6/7
Full write-up below.
Would appreciate your feedback! 👍
Great week all!
7/7
hiddenvaluegems.com/myportfolio/ex…
Would appreciate your feedback! 👍
Great week all!
7/7
hiddenvaluegems.com/myportfolio/ex…
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